Northrop graduated from high school in 1913 and in 1916 became a draftsman and designer for the Lockheed (formerly Loughead) brothers, builders of seaplanes and sport biplanes in Santa Barbara, Calif. From 1923 to 1927 he designed fuel tanks for the Douglas Aircraft Company in Santa Monica, and then he joined Allan Lockheed as chief engineer for the Lockheed Aircraft Company (Lockheed Martin Corporation), Hollywood. There he designed and built the Vega, a high-wing monoplane noted for its plywood fuselage of monocoque, or stressed-skin, construction, in which the plywood sheath, rather than heavy internal trusses, provided the structural support.

In 1928 Northrop cofounded the Avion Corporation in nearby Burbank, where he perfected a light, strong “multicellular” wing, built up from a number of sheathed-over, boxlike subcompartments. In 1929 Avion was bought by United Aircraft and Transport Corporation and was renamed Northrop Aircraft Corporation. Under this arrangement Northrop produced the low-wing, aluminum Alpha, which was used to carry mail and passengers. In 1932 he formed the Northrop Corporation (Northrop Grumman Corporation) in partnership with Douglas, which used his multicellular wing structure on its famous DC-3 passenger and transport plane. In 1939 he founded Northrop Aircraft, Inc., and directed it until his retirement in 1952. Northrop's lifelong interest was in the flying wing, a configuration consisting essentially of a short but very broad wing with no fuselage and tail. From the 1920s he experimented with several small prototypes, and during World War II he designed a bomber 172 feet (52 m) wide and 53 feet (16 m) long. First flown in 1946, the XB-35 was powered by pusher propellers; its jet-propelled version, the YB-49, first flew in 1947. The following year the U.S. Air Force rejected the flying wing, citing as one factor the instability caused by its lack of a vertical tail fin, but four decades later the Northrop Corporation adapted Northrop's design to new control mechanisms and radar-avoiding materials in designing the B-2 stealth bomber.